Facebook recently acquired a company called WhatsApp for $19 Billion dollars. While it’s been written about countless times since the news aired, nearly all of the focus has been on the valuation of the company. Let’s face it, $19 Billion is a lot of cash, and notwithstanding Mark Zuckerberg’s intelligence and vision, there’s a lesson here about the “expensive no.”
The “expensive no” happens every day and in every organization. It’s sometimes strategic and calculated. It often involves making early judgments on future ROI or predicting what the market wants at some later point. But most often the “expensive no” is based on fear and ego. Let me explain…
In 2009, Brian Acton interviewed with Facebook. He was fresh off a stint with Yahoo! and apparently had some ideas about what the future of mobile messaging could look like. Facebook declined and Acton co-founded WhatsApp which quickly grew into a 450,000 user global community. Fast forward to present day and you’ve got the guy (Zuck) who missed the opportunity and the guy (Brian) who got rejected making amends so to speak. It’s my bet that Zuckerberg had been chewing on the success of WhatsApp for years and finally threw in the towel by doing what few could do and no one else would do, pay a ridiculous price for a network of users. That’s an “expensive no.”
In 1997, I decided to work for a startup Internet Service Provider (ISP) in San Diego and I quickly realized that not only did people want Internet service, they also wanted to create websites. I determined that my new employer could triple his revenue overnight if he simply provided some of the web design services people wanted. He refused. That was an "expensive no." I left shortly after and started a web development company. Two years later, my company was acquired and that ISP went out of business.
As leaders in business, churches, and not-for-profit organizations, we love to say “no” to the things we don’t understand or cannot control. We often cloud our “no’s” in talk of strategic initiatives, budget constraints, and past performance. We let fear of failure and the unknown take the biggest game changing ideas and dilute them down or squash them altogether. We can’t and shouldn’t say yes to everything. But when we say “no” for the wrong reasons, we often pay for it later. Thomas Edison once said, “Vision without execution is hallucination.” I’d add that innovation without risk is an “expensive no.”